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Intellectual Property

This web page
features the full text ofRevised
Administrative Circular No. 07-2004

REVISED ADMINISTRATIVE CIRCULAR NO. 07-2004

PROVIDING A PROGRAM
FOR THE MANAGEMENT OF UNNECESSARY PROPERTY OF THE JUDICIARY.

WHEREAS, the Davide Watch envisions a
Judiciary
that is, among others, effective and efficient, and toward that end,
provides
that the Judiciary shall engage in long-range planning, especially as
regards
allocation of human and other resources, to effectively respond to
changes
while preserving the core values of the Judiciary; and

WHEREAS, the Constitutional Fiscal Autonomy Group
(CFAG)
has established guidelines for the disposal of unserviceable government
properties to avoid their further deterioration, as well as to generate
benefits in terms of higher appraisal value, lower storage costs, and
better
management of office space;

WHEREAS, the centralized disposal of
unserviceable
Judiciary properties in the lower courts has proven to be inefficient
in terms
of economic management as transporting back to the Supreme Court of
such
properties for disposal has often resulted in wastage, loss or
devaluation of
the properties, and in additional costs for handling and transportation;

WHEREAS, there is thus a need for guidelines for
the
disposal of unnecessary Judiciary properties, taking into consideration
the
facilities and resources available to the different levels of courts
with
regard to such disposal;

WHEREFORE, a program is hereby provided for the
management
of unnecessary properties of the Judiciary.

I.
General Statements

1. Definition of
Terms

1.1 "Unnecessary
property" is property that is not essential to the needs or operations
of
the particular office that has possession of it. The term shall include
items
that:

1.1.1
are obsolete
due to changed procedures, functions or usage patterns;

1.1.2
no longer
comply with occupational health and safety standards;

1.1.3
are no longer
needed;

1.1.4
have exceeded
their economic life;

1.1.5
have become
unserviceable for any cause;

1.1.6
require
repair or maintenance in excess of fifty percent (50%) of its current
market
value; and

1.1.7
require
special handling, such as gifts and decorations from foreign
governments and
individuals, and items of cultural value.

1.2
"Responsible
officer" refers to the official tasked with undertaking the disposal of
Judiciary property under their authority. For the Supreme Court, the
term
refers to the SC Disposal Committee or as the case may be, the SC Chief
Judicial Staff Officer of the Property Division, Office of
Administrative
Services. For all other courts, the term refers to the Chairperson of
the
pertinent Disposal Committee. For all courts below the Supreme Court,
all
actions required under this Administrative Order from the responsible
officer
shall be understood to have been performed in coordination and
consultation with
the members of the pertinent Disposal Committee.

2.2
The disposal
of unnecessary Judiciary property must be transparent. The
responsible officer
may, therefore, be asked to justify decisions taken and should exercise
sound
judgment in making disposal decisions.

2.3
The
responsible officer shall at all times be aware of the status of
property
possessed by the court/s in which he/she is assigned. To this end,
he/she will
endeavor to maintain complete and accurate records of Judiciary
property under
his/her control.

2.4
Items can be
available for disposal once they become unnecessary property.

2.5
Immediate
disposal of property or equipment may be made by the Property Officer,
or
responsible officer of the: (a) Supreme Court Disposal Committee; (b)
Regional
Disposal Committee (RDC); or (c) Metropolitan Trial Court Disposal
Committee
(MeTCDC) in instances where the property or equipment to be disposed
are
remnants of fire, earthquake or similar calamities, and their
accountabilities
could no longer be ascertained. In such a situation, the Property
Officer or
responsible officer, may dispose the said property or equipment,
subject to
prior authorization of the Chairman of the, respective Committees.

2.6
Property
disposal in areas outside of Metro Manila should occur in those areas
where it
is practicable and economically viable.

2.7
The Judiciary
will not offer any warrant on the condition of items it disposes,
especially
when such disposal is conducted by sale or auction.

2.9
Disposable
equipment shall be sold not lower than its book value or salvage value
as
determined using the following formula:

Appraised Value (AV) = Book Value (BV) where:

BV = Acquisition Cost (AC) x Depreciation Factor (D)

D = remaining
life

Estimated
life

For items exceeding their
useful life, the
appraised value (AV) shall be equal to their salvage value (SV) or ten
percent
(10%) of their acquisition cost (AC).

2.10
The
following table states the estimated economic lives of the properties
described
therein:

YEARS OF
PROPERTYECONOMIC
LIFE

I. MOTOR VEHICLES7

II. OFFICE
EQUIPMENT, FURNITURE

AND
FIXTURES

Office
Equipment5

Furniture
and
Fixtures10

IT
Equipment -
Hardware5

Library
Books5

III. MACHINERIES & EQUIPMENT

Machineries10

Communication
Equipment10

Medical,
Dental and
Laboratory10

Equipment

Sports
Equipment10

Technical
and
Scientific Equipment10

Other
Machineries and
Equipment10

2.11
When proceeds
are derived from the disposal of unnecessary property, such proceeds
shall
constitute part of the Judiciary Development Fund pursuant to the
Court's
Resolution dated 19 September 1999 in A.M. No. 99-8-01-SC.

II.
Disposal
Committees

The following Disposal Committees are hereby
created:

1. Supreme
Court Disposal Committee.

A Disposal Committee is hereby established in the
Supreme Court,
for all offices under it, hereafter known as Supreme Court Disposal
Committee
(SCDC) composed of the following:

Members
1. Chief Accountant, SC, or
his duly authorized representative

2. SC
Chief Judicial
Staff Officer, Property Division, SC

3. SC
Chief Judicial
Staff Officer, Property Division, OCA

Secretary-Recorder
To be designated by the Chairman

2. Regional Disposal Committee (RDC).

One RDC shall be created in each of the fourteen
(14) Judicial
Regions. It shall take charge of the disposal of unnecessary properties
of the
Regional Trial Court, the Municipal Trial Court in Cities, the
Municipal Trial
Courts, the Municipal Circuit Trial Courts, and the Shari'a District
and
Circuit Courts in any particular Judicial Region. Each RDC shall be
composed of
the Regional Trial Court (RTC) Executive Judge as Chairman and two (2)
RTC
judges, a first level court judge, and the RTC Clerk of Court (OCC) as
members.
The Chairman shall nominate for appointment by the Chief Justice the
two (2)
RTC judges and the judge representing the first level courts as
members, and
appoint the three-member Secretariat from among personnel under his/her
territorial jurisdiction. The Office of the Court Administrator shall
ensure
that the fourteen (14) RDCs are organized within three months from the
effectivity of this Order.

3. Metropolitan Trial Court Disposal
Committee (MeTCDC).

A MeTCDC shall be created for the Metropolitan
Trial Court in the
National Capital Judicial Region which shall take charge of the
disposal of
unnecessary Judiciary property under its control and administration.
The MeTCDC
shall be composed of the Executive Judge as Chairperson and another
Metropolitan Trial Court Judge and the Clerk of Court (OCC) as members.
The
Chairperson shall nominate for appointment by the Chief Justice the
member-judge and shall appoint the three-member Secretariat from among
the
personnel under his/her territorial jurisdiction. The Office of the
Court
Administrator shall ensure that the MeTCDC is organized within three
(3) months
from the effectivity of this Order.

III.
Procedure Prior
to Disposal

1. Within one (1) month from the issuance of
this order, the
responsible officer shall carry out a physical inspection of the court
in which
he/she is assigned to: (1) inventory all supplies and equipment within
said
court; (2) request copies of the list of properties issued in the
court/s under
his/her jurisdiction; and, (3) if possible request the corresponding
copies of
the Memorandum Receipts therefor for purposes of reconciliation.
Said officer
shall maintain a secure, computerized record of said inventory where
possible,
or a manual record where a computer is not available. Thereafter, said
officer
shall regularly update the record of properties within the court in
which
he/she is assigned. (Form 1)

2. The inventory shall contain the following
details:

2.1.
The property
number, funding number and other specifications necessary for
establishing the
correct identification of the properties inventoried.

2.2.
A detailed
description of the nature and condition of the properties, including a
determination of whether any of the properties is still operational,
under
repair, repairable, or beyond repair, and a description of the extent
of use,
mileage, rate of depreciation and any excessive wear and tear of the
items.

2.3.
Where
applicable, a list of the missing parts and the extent of damage which
renders
any of the properties classifiable as unnecessary.

2.4.
The value of the
properties.

3. Upon completion of the inventory, the
responsible officer
shall, upon consultation with the user/s of the subject properties,
determine
which properties may be considered unnecessary and, therefore, suitable
for
disposal. Thereafter, the responsible officer shall, at least once each
year,
determine which items may be classified as unnecessary property.

4. The responsible officer shall request an
inspection by the
Resident Auditor or local field auditor, as the case may be, of the
properties
classified as unnecessary.

5. After the inspection and based on the
foregoing information,
the responsible officer shall decide whether to recommend the disposal
of any
of the unnecessary properties; However, before disposal is recommended,
the
responsible officer shall determine whether the item to be disposed may
be
replaced or repaired under warranty. The responsible officer shall
exercise
that option which is most advantageous to the Judiciary.

6. The responsible officer in the lower
court shall first obtain
authority to dispose of the unnecessary property from the Property
Division of
the Office of the Court Administrator prior to disposal. A proper
listing of
the properties to be disposed, including their assessed value, shall be
made,
and the proposed mode of disposal of the same shall be indicated
therein.
Based on the requests for authority received from responsible officers
of the
lower courts, the Property Division shall generate further guidelines
to allow
the responsible officers to reach decisions on disposal.

7. The responsible officer shall determine
whether it is
beneficial to the Judiciary to perform minor repairs on items prior to
their
disposal based on whether such repair will make the items more saleable
and
provided that the increase in return is greater than the cost of repair.

8. The responsible officer shall ensure that
unnecessary
properties are, prior to disposal, kept in a secure location and not
used once
disengaged from service so as not to impair the value or condition
thereof and
to minimize the risk of theft, damage, loss or deterioration.

9. The responsible officer shall ensure that
items for disposal
do not contain material that is not intended for disposal, as failure
to do so
could result in material being misused or used for fraudulent purposes,
or
confidential information being leaked. Materials that should be
inspected
include stationery (especially stationery containing the letterhead of
a
court), computer software, records, files, and other papers.

10.
The
responsible officer shall ensure that the notice or invitation for the
disposal
of the property shall contain a good comprehensive description of the
property
to be disposed to ensure its quick disposition. Inadequate or
inaccurate
descriptions result in follow- ups to obtain the necessary information,
leading
to delays in the disposal process and lost opportunities for quick
transfer.

IV.
Modes of Disposal

Unnecessary property may be disposed by trade-in,
transfer to
other offices of the Judiciary, sale to personnel, public auction or
bidding,
sale through negotiation after two (2) unsuccessful public biddings or
failure
of public auction, transfer without costs to other government agencies,
or
destruction or condemnation. The Disposal Committee shall undertake
that mode
of disposal which is most advantageous to the Judiciary.

1. Trade-in

1.1.
Unnecessary
properties may be traded-in for upgraded items.

1.2.
To ensure
reasonable options for trade-in, the Disposal Committee shall obtain
trade-in
offers from at least three (3) bidders. Such offers shall be
obtained by a
request sent by telephone, fax or mail to a company that sells property
similar
to the one being disposed. (Form 2)

1.3
The
requested companies shall be allowed a period of seven (7) days from
their
receipt of the request to submit their offer for trade-in. After the
lapse of
the period, the responsible officer shall commence evaluation of the
trade-in
offers received.

1.4
In choosing
which bidder to trade-in the item being disposed, the responsible
officer shall
take into consideration the price which represents a fair value for the
item
being traded-in.

2. Transfer to Other
Offices

2.1.
The Disposal
Committee shall, once per quarter, report to the Supreme Court Property
Division unnecessary properties and the additional properties required
by the
court/s under his/her jurisdiction.

2.2.
The Supreme
Court Property Division shall then cause to be transferred to the
appropriate
court those usable excess properties from other court/s or office/s,
taking into
consideration the Guiding Principles stated above.

3. Sale to Personnel

3.1.
Sale to
personnel shall not be seen as a staff entitlement but merely a
disposal option
selected by the Disposal Committee to maximize returns on asset
disposal.

3.2.
Sale to personnel
shall, for Supreme Court property, be conducted by the Committee on
Bids; and
for property of the lower courts, by the applicable Disposal Committee.

3.3.
In order to
determine the best price for the unnecessary property, and ensure
fairness in
the sale process, the Disposal Committee shall ensure the widest
possible
participation of personnel by posting a notice of sale in three (3)
prominent
areas in the Hall of Justice or the building in which the court
disposing of
the property is located. The notice shall state the specifications of
the
unnecessary property, the minimum allowable price for the property, the
date,
time and place for the opening of bids for the property, the location
where the
property is stored, the dates when the property may be inspected, and
the dates
when bids may be submitted; provided that the bids shall be submitted
to the
responsible officer during office hours within the dates stated in the
notice;
provided further that during the time designated for the opening of
bids, no
further bids shall be received.

3.4.
The
responsible officer, or in the case of the Committee on Bids, the
Committee
Secretary, shall number the submitted bids according to the order in
which
these were received by him/her.

3.5.
The opening
of bids shall be conducted in the presence of the personnel who
submitted a bid
for the property to be disposed.

3.6.
The property
shall be awarded to the highest bidder complying with the minimum
allowable
price.

4. Public Auction or
Bidding

4.1.
Public
auction or bidding shall, for Supreme Court property, be conducted by
the
Committee on Bids; and for property of the lower courts, by the
applicable
Disposal Committee.

4.2.
The
appropriate committee shall comply with prevailing publication
requirements
prior to actual bidding or auction. For this reason, the
committee shall
ensure that the returns to be gained from the auction shall exceed the
costs of
publication. In case the cost of publication exceeds the expected
returns,
posting in conspicuous place for a period of ten (10) days must be made.

4.3.
The
appropriate committee shall likewise comply with prevailing
requirements for
the opening and awarding of bids in public auctions or bidding.

5. Sale through
Negotiation

5.1.
After two
(2) unsuccessful public biddings, the Disposal Committee may dispose of
the
excess property by sale through negotiation. For this purpose, the
Committee on
Bids shall first certify to two (2) unsuccessful public biddings, and,
in view
of which, shall authorize at least three (3) members of the Committee
(SC) and
the responsible officer (lower courts) to conduct sale through
negotiation.

5.2.
Sale through
negotiation shall be subject to such competition as is feasible.

6. Transfer without
Cost

6.1.
Transfer to
another government agency shall be resorted to when trade-in or
transfer to
other offices of unnecessary property are inappropriate or impractical,
and
when the attempted sale of said property has produced no result;
provided that
such transfer shall be without cost.

6.2.
Any transfer
without cost shall be submitted to the Chief Justice or his duly
authorized
representative for approval.

6.3.
The transfer
shall be authorized by the heads of either agencies or their duly
authorized
representatives.

7. Destruction or
Condemnation

7.1.
Destruction
or condemnation may be resorted to under any of the following
circumstances:

7.1.1.
The
property has no commercial value. No commercial value means that
the property
has been determined to have neither utility nor monetary value either
as an item
or as scrap.

7.1.2.The
property is beyond economic repair.

7.1.3.The
property has no willing receiver.

7.1.4.
The cost
of care, handling and preparation of the property for sale would be
greater
than its appraisal value.

7.1.5.
A law or
regulation requires destruction or condemnation of the property.

7.1.6.
Written
instructions by a duly authorized official (health, safety or security
officer)
for direct destruction or condemnation.

7.2.
Destruction
or condemnation may only be done through burning (except if it would
affect the
ozone layer) pounding or throwing beyond recovery and the like.

7.3.
The Resident
Auditor/Local Field Auditor must be present during the destruction of
the
property.

7.4.
A Waste
Material Report (WMR) (Form 3), shall be prepared by the responsible
officer to
document the destruction or condemnation of the property. For the
lower
courts, the responsible officer shall forward these documents to the
Supreme
Court Property Division in triplicate.

V.
Additional
Procedures for Certain Properties

1. Items of Cultural
Value

1.1.
Certain
properties may constitute items of genuine heritage and cultural value,
which
must therefore be preserved for future generations. These items include
gifts
and donations from foreign governments and individuals received for the
court
where the recipient is assigned, or for the Judiciary as an
institution, or
otherwise given to the recipient not in the latter's personal capacity
or in
appreciation of the recipient. The recipient may, however, donate an
item
received in his/her personal capacity to the court where he/she is
assigned or
to the Judiciary as an institution, in which case it shall be acted
upon in
accordance with these guidelines.

1.2.
Before
disposing of such items, the Disposal Committee shall first determine
whether
the items may be considered of cultural value, which organizations are
suitable
custodians of the items, and whether to sell, lend or donate the items
on a
long term basis. In making such determination, the Disposal Committee
shall
also consider the capability of his/her court to preserve the item.

1.3.
When
disposing of items of cultural value it is not always appropriate to
seek the
best available net return. When offering items to museums,
special interest
groups or the community, it is important to consider the organization's
capacity to purchase, maintain and care for the items. In some
circumstances,
it maybe more desirable to accept an offer which is less than the
market value
to ensure that the items are preserved by the appropriate organization
or
institution.

2. Technology
Property

2.1.
Technology
property shall be understood to include such equipment as computers,
printers,
modems, fax machines, automatic voltage regulators, and similar
equipment
including the software contained therein.

2.2.1.
All
storage media, such as hard disks, are properly erased so that data is
unrecoverable. If data cannot be erased due to a
non-functioning device, then
the storage medium should be physically damaged to prevent recovery of
data. In
case of the latter, notice shall be given to the buyer that the storage
medium
is so damaged.

2.2.2.
All
configuration data from computers, print servers, communications
equipment,
etc. shall be erased so that no network information can be retrieved.

2.2.3.
All data
on a computer are checked, archived and destroyed as necessary.

2.2.4.
Software
licenses for the computer are noted and transferred to the appropriate
personnel.

2.3.
In disposing
of technology-property, it must be considered that an improved return
on
disposal can be achieved where the equipment is seen to be in working
order
prior to it being taken out of service.

2.4.
In disposing
of software, it is important to determine whether it is owned or
licensed by
the Judiciary. If the status is unclear, advice from the Property
Division must
be sought. Software licenses may be resold depending on the terms of
the
license. Sales must include the original disks and documentation.

3. Vehicles

3.1.
The Property
Officer shall maintain a record of all expenses related to the
maintenance of
Judiciary vehicles under his/her jurisdiction. (Form 4)

3.2.
Regardless
of the estimated economic life of vehicles as stated in a subsequent
section
when, based on the aforementioned record, it becomes apparent that the
cost for
maintaining a certain vehicle - consisting of costs of repairs and
consumables
other than fuel and motor oil - exceeds its potential resale value, the
same
may be considered unnecessary by the Property Officer and thus
recommend for
disposal.

4. Intellectual
Property

4.1.
Special
consideration must be given to the nature of intellectual property and
their
disposal. Intellectual property includes patents, trademarks,
copyright,
licenses or any other items considered appropriate by the Property
Division.
The Office of the Chief Attorney of the Supreme Court has overall
responsibility for decisions on requests to assign or dispose of
intellectual
property in which the Judiciary or the National Government owns
copyright.

VI.
Procedures
Applicable to All Modes of Disposal

1. After disposal, the Disposal Committee or
the responsible
officer must, within a period of ten (10) days, furnish the Financial
Management and Budget Office, SC, or Financial Management Office, OCA,
for
lower courts and the Resident Auditor or local field auditor a WMR or
Invoice
Receipt of the property disposed, as the case may be, to support the
dropping
of the property from the Books of Account.

2. After disposal, the Disposal Committee or
the responsible
officer shall accomplish the Disposal Report (Form 5), and submit the
same to
the Head of the Property Division, who shall then consolidate all such
forms
submitted from the lower courts with disposals conducted by the Supreme
Court
into a Disposal Report. The Head of the Property Division shall submit
the
consolidated report to the Chief of Administrative Services and the
Court
Administrator for their appropriate action and planning.

3. To ensure that disposals are undertaken
in an efficient,
consistent and equitable manner, the Supreme Court Property Division
shall,
once per semester, evaluate the process and outcome of each disposal.
Evaluations should include all information and relevant facts about the
disposal and should document all decisions made so as to create an
audit trail
for future reference. The audit and review of asset disposal processes
may be
included in the Supreme Court's internal audit program.

4. The Supreme Court Property Division shall
use the evaluations
referred to above to formulate cost-benefit models to assist in the
selection
of the most appropriate disposal method, and to identify risks and
prepare
arrangements to effectively and address such risks.

VII.
Participation of
Other Offices

1. The Office of Administrative Services, in
coordination with
the Philippine Judicial Academy (PHILJA) and the Office of the Court
Administrator, shall ensure that the necessary personnel shall receive
the required
training or orientation to effectively implement the provisions of this
Order.
The training and orientation of said personnel shall be completed
within eight
(8) months from the effectivity of this Order.

2. The Management Information Systems Office
(MISO) shall design
a computer program that will accommodate the requirements of this
Order, with
the end in view of facilitating and/or automating the disposal process.
The
required computer program shall be completed within six (6) months from
the effectivity
of this Order. Upon completion of the program, the MISO, in
coordination with
the PHILJA, shall ensure that the necessary personnel shall receive the
required training regarding the operation of the program.

3. In the interest of transparency and
accountability, the Public
Information Office shall ensure that this Order is publicized to the
Court's
various publics in whatever form and format it deems appropriate,
immediately
upon the effectivity of this Order.

4. This Order shall be published in the
Supreme Court website
immediately upon its effectivity.